Recession, capitalism or IT to blame for media cutbacks?

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From retail to manufacturing and from trade to investment, the economic crisis has taken its toll in Britain. Now, the impact has expanded to the media industry across the country, resulting in cutbacks and redundancies.

However, rather than accepting the forced redundancies, journalists and their unions have come together to fight against the job cuts, which they say are “unjustifiable”.

The industry has failed to adapt quickly enough to advances in modern technology, especially since the advent of the Internet. And media companies’ appetite for excessive profits, building up huge debts and reckless management are regarded as the biggest threats to British journalism.

For the full story, by Dongying Wang, published by Xinhua News Agency in January 2009, please click here. Also please return to the blog to post your comment.

Forceful measures urged to starve off recession

In face of the first and worse recession since 1991, Britain has been urged to stand firm to fend off any further slump, and dig its economy out of the downturn with more powerful measures.

Britain has officially fallen into recession after having undergone negative economic growth over the second half of 2008. The confirmation of recession in the country came on Friday as figures showed its GDP fell by 1.5 percent in the final quarter of 2008, following a 0.6 percent drop in the third quarter.

The Office of National Statistics said that the increased rate of decline in GDP resulted mainly from weaker services and production industries output.

Services output weakened by 0.5 percent and 1.0 percent, respectively, in the third and fourth quarter of last year. Meanwhile, the decline in total production was 1.4 percent and 3.9 percent over the two quarters. Manufacturing output made the largest contribution to the slowdown, falling by 4.6 percent in the fourth quarter, compared with a 1.6 percent decrease in the previous quarter.

"These numbers are much worse than expected and this is the sharpest contraction in the economy since 1980," said John Cridland, deputy director-general of the Confederation of British Industry.

"The intensity and speed of falling demand combined with the global credit crunch mean this recession is going to be more painful than the early nineties, and sadly one consequence of this will be much higher unemployment."

Cridland expressed hope that the impact of interest rate cuts, falling inflation, the fiscal stimulus, and the government's recent measures to kick-start lending will have a stabilising effect later this year.

His view was shared by David Kern, economic adviser to the British Chambers of Commerce.

He said the sharp decline in GDP also makes it critical for the country to persevere with forceful and corrective measures, while expressing hope that the huge stimulus package that the new U.S. administration plans to introduce could have beneficial global consequences.

In October 2008, Kern called the British policy makers to focus on alleviating the worst consequences of the downturn. At the same time, he urged not to exaggerate the gloom, saying Britain was not in a severe slump and could still avoid the worst.
However, Britain has been battered more severely than expected. The country has been warned of seeing a decline of 2.4 percent in GDP for 2009.

"While the short-term outlook is dire, it is important not to drift into excessive despondency. The government and MPC (the Monetary Policy Committee of the Bank of England) still have important weapons at their disposal, which they will undoubtedly deploy, " Kern added.

Brendan Barber, the Trades Union Congress general secretary, echoes the views of David Kern, saying "This recession is not bad luck or an inevitable swing of the pendulum."

"Its cause is irresponsible behaviour by banks and financial institutions taking advantage of the deregulation started by Mrs Thatcher and President Reagan, and continued to a greater or lesser extent ever since, " Barber added.

Barber also urged the British government to strain every sinew to make the recession "as short and shallow as possible", meanwhile to set up a tough public inquiry into what went wrong and why.

The spill over of the U. S. financial crisis has taken its toll of economies across the world. Over the last few weeks, the global economic crisis has intensified, resulting in more companies falling into trouble, declining production and rising job cuts.

Britain is among the few EU countries most affected by the global downturn. In order to stimulate the economy, Britain has introduced many measures, from interest rates and VAT cuts, job rescue plans to two banking bailout packages.

However, many have suggested that the country should adopt a range of more effective and brave measures, such as cutting the interest rates to zero, to support lending, help businesses and protect jobs.

Obviously, Britain is facing a tough test to prevent its economy sliding deeper into recession and avoiding further collapse.

Copyright Dongying Wang

Falling demand slows British manufacturing

Aerial veiw of CNH, a world leading tractor maker in England

Together with a tight credit market, falling market demand has given a damaging blow to British manufacturing, pushing the country's economy further to the edge of collapse.

The Confederation of British Industry (CBI) has warned that prospects for the next few months will become even more gloomy, as business orders continue to fall.

The manufacturing industry accounts for 13 percent of Britain's GDP and half of its exports, and is only second to the United States in terms of attracting foreign direct investment.

For the full story, by Dongying Wang, published by Xinhua News Agency in January 2009, please click here. Also please return to the blog to post your comment.

Are Britain's hopes to join the euro dashed?

The worst case scenario for Britain not joining the euro would manifest itself if countries like India and China increase their foreign currency reserves in the euro, an economist and peer of the House of the Lords has warned.

Euro membership has returned to British agenda. It comes on the 10th anniversary of the launch of the European single currency, which has been adopted by 16 of the 27 European Union member states.

However, the chances for Britain to join the euro may be dashed, since the eurozone may not want a sinking economy to enter their fold. Investment guru Jim Rogers has this week warned against investing in Britain and said that the pound is "finished".

For the full story, by Dongying Wang, published by Xinhua News Agency in January 2009, please click here. Also please return to the blog to post your comment.

Banks urged to lend to stem rising unemployment

In the face of rising unemployment, the British government has been urged to pressure banks to lend in order to stimulate business activities, following its second banking rescue plan announced on Monday.

"After this week's second bailout, the government must get banks lending again if the tide of rising unemployment is to be pushed back," said David Frost, director general of the British Chambers of Commerce.

For the full story, by Dongying Wang, published by Xinhua News Agency in January 2009, please click here. Also please return to the blog to post your comment.

Economic crisis forces through Heathrow expansion plan

Despite claims by governments that the environment remains top of their agenda, they have often had to make a sacrifice as the economy becomes a greater priority.

This is reflected by the recent decision by the British government, which gave the go-ahead to the controversial expansion of Heathrow airport in London, one of the busiest air hubs in the world.

Heathrow's expansion has become even more crucial as Britain attempts to dig its way out of a deep recession. Though environmentalists have fought a long battle against the plans, their voices have fallen on deaf ears.

For the full story, by Dongying Wang, published by Xinhua News Agency in January 2009, please click here. Also please return to the blog to post your comment.

Frugality applies to all in economic downturn

Britain's recession is biting as hard as its unusually cold winter. The fall of banks, retailers, manufacturers and many other businesses have drawn much media attention with related figures and statistics reaching a saturation point.

But the impact upon individuals has generally been ignored, and worsening unemployment has only been highlighted as evidence of the severity of the meltdown in the country.

As the meltdown deepens, Britons are becoming more careful with their money and try to balance their budget by adopting a thrifty lifestyle.

For the full story, by Dongying Wang, published by Xinhua News Agency in January 2009, please click here. Also please return to the blog to post your comment.

Photo taken by Ben30's

British job rescue plan expects tough test

As part of efforts to offset the impact of the downturn, British Prime Minister Gordon Brown Monday launched a job rescue scheme, with an aim to offer jobs and training to 500,000 people over two years.

Gordon’s plan has met mixed responses. “Wrong, Wrong, Wrong” opposition leader David Cameron commented on the 500-million-pound initiative. As unemployment soars day by day in Britain, much faster than expected, can Brown’s plan save mounting jobless and bring Britain out of the recession?

For the full story, by Dongying Wang, published by Xinhua News Agency in January 2009, please click here. Also please return to the blog to post your comment.

British manufacturing suffers a big blow in the downturn

P. & G. factory on the Thames, southeast England

Britain's manufacturing has been battered severely in the downturn, and its sharp decline has made it a leading story in the media following similar stories of finance, property markets and retail.

Over the past 300 years, manufacturing has built Britain into a world leading trader. How could falling manufacturing affect the British economy? And what should the country do to protect the industry from bigger losses?

For the full story by Dongying Wang, published by Xinhua News Agency in January 2009, please click here. Please return to the blog to post your comments.

Tourism slows down, Britain pin hopes for 2012 Olympics

Illuminated ads in London Picadilly Circus look towards 2012

The global downturn has taken its toll on tourism and Britain has been no exception despite being the world's sixth top tourist destination.

During August to October 2008, the number of visits to the UK by overseas residents decreased 4 percent to 7.8 million compared to the previous three months, according to the Office for National Statistics.

Over the same period, the number of visits abroad by UK residents decreased by 6 percent to 16.4 million, with associated spending falling 6 percent to £8.8 billion.

For many British people, routine holidays, especially trips abroad, have been affected by a depreciating pound. Its devaluation has mainly resulted from sharp cuts in interest rates as Britain beefed up its efforts to achieve economic recovery.

The latest reduction has sunk the basic rate to 1.5 percent, the lowest level since the Bank of England came into existence in 1694.

Compared to the British situation, the emerging tourism markets in Asia have broadly followed similar slowdown patterns.

International tourist arrivals in Asia and the Pacific are estimated to have increased by around 3 percent between January and October 2008, as compared to a 10.5percent growth for the whole year 2007, according to The World Tourism Organization.

As the tourist industry becomes a more important contributor to the economy, Britain is eyeing rising visits from Asia, especially China and India.

Needless to say, the appreciation of Chinese RMB against the pound by 33 percent ever since late 2007 has enabled Chinese visitors to feel more relaxed when paying their bills in the UK.

However, the gloomy situation in Britain has spoilt the pleasure and excitement of many ordinary Chinese visitors as they spend their devalued pound.

Li Zhong and his wife are paying their second visit since 2006 to see their daughter who is working in London.

"We don't need to worry about the price of whatever we would like to buy in China, but in London we have to think about every penny we want to spend, "Li said, "Because I can see earning money is getting difficult. The rising unemployment increases the anxiety of uncertainty for the future as there are fewer job opportunities in Britain."

"So even if the pound is devalued, we still prefer to spend in China rather than in Britain," he said.

"In the long term, the continuing devaluation of the pound is not good for the British economy, its customers, and especially hard-working people in this country," he said.

The 2008 Christmas sales which started earlier than usual in London left Li with a strong impression. However, the couple bought fewer bargains than their first visit here as they want their daughter to save the money for the gloomy times ahead. They have even decided not to visit their daughter again in the coming years.

Facing further economic woes ahead, Britain has pinned its hopes for a boom in the tourist industry as it builds towards the 2012 Olympics.

Copyright Dongying Wang

Read a related article, “Weaker pound forces Britons to tighten holiday budget,” written by Dongying Wang and published by Xinhua News Agency in January 2009, please click here.

Can weaker pound push Britain closer to euro?

A strong British economy has in the past attracted many foreigners to settle in the UK with the hope for a better future. However, their expectations may have been dashed as the pound loses its value dramatically, brought about by the Wall Street financial crisis.

A devaluating pound has triggered speculation that Britain may move closer to the euro, but many believe it is unlikely the country will adopt the European single currency in the near future.

For the full story by Dongying Wang, published by Xinhua News Agency in January 2009, please click here . Please return to the blog to post your comments.

HAPPY NEW YEAR 2009 新年快乐

New Year's eve fireworks display in London